Truth in Lending (Regulation Z) Annual Threshold Adjustments (Credit Cards, HOEPA, and ATR/QM), 41158-41160 [2017-18003]
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Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Rules and Regulations
implementing regulations to restrict
DOE’s ability to allocate the Transaction
Advisory Costs or other Category II
Costs associated with a particular
application to the relevant applicant.
Based on its interpretation of the
statute as explained in this rule,
applicants for ATVM loans can bear all
Transaction Advisory Costs associated
with their respective applications.
Applicants would pay Transaction
Advisory Costs pursuant to direct
agreements executed by and between
the applicant and each relevant outside
transaction advisor, in a form acceptable
to DOE and each such transaction
advisor, no later than the date
determined by DOE in its discretion
with respect to such pending
application.
II. Approval of the Office of the
Secretary
The Secretary of Energy has approved
publication of this interpretive rule.
List of Subjects in 10 CFR Part 611
Administrative practice and
procedure, Loan programs—energy,
Reporting and recordkeeping
requirements.
Issued in Washington, DC, on August 24,
2017.
John Sneed,
Executive Director, Loan Programs Office.
[FR Doc. 2017–18400 Filed 8–29–17; 8:45 am]
BILLING CODE 6450–01–P
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
Truth in Lending (Regulation Z) Annual
Threshold Adjustments (Credit Cards,
HOEPA, and ATR/QM)
Bureau of Consumer Financial
Protection.
ACTION: Final rule; official
interpretation.
AGENCY:
SUMMARY: The Bureau of Consumer
Financial Protection (Bureau) is issuing
this final rule amending the official
interpretations for Regulation Z, which
implements the Truth in Lending Act
(TILA). The Bureau is required to
calculate annually the dollar amounts
for several provisions in Regulation Z;
this final rule revises, as applicable, the
dollar amounts for provisions
implementing TILA and amendments to
TILA, including under the Credit Card
Accountability Responsibility and
Disclosure Act of 2009 (CARD Act), the
Home Ownership and Equity Protection
Act of 1994 (HOEPA), and the Dodd-
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Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act). The
Bureau is adjusting these amounts,
where appropriate, based on the annual
percentage change reflected in the
Consumer Price Index (CPI) in effect on
June 1, 2017.
DATES: This final rule is effective
January 1, 2018.
FOR FURTHER INFORMATION CONTACT:
Jaclyn Maier, Counsel, Office of
Regulations, Consumer Financial
Protection Bureau, 1700 G Street NW.,
Washington, DC 20552 at (202) 435–
7700.
SUPPLEMENTARY INFORMATION: The
Bureau is amending the official
interpretations for Regulation Z, which
implements TILA, to update the dollar
amounts of various thresholds that are
adjusted annually based on the annual
percentage change in the CPI as
published by the Bureau of Labor
Statistics (BLS). Specifically, for openend consumer credit plans under TILA,
the threshold that triggers requirements
to disclose minimum interest charges
will remain unchanged at $1.00 in 2018.
For open-end consumer credit plans
under the CARD Act amendments to
TILA, the adjusted dollar amount for the
safe harbor for a first violation penalty
fee will remain unchanged at $27 in
2018 and the adjusted dollar amount for
the safe harbor for a subsequent
violation penalty fee will remain
unchanged at $38 in 2018. For HOEPA
loans, the adjusted total loan amount
threshold for high-cost mortgages in
2018 will be $21,032. The adjusted
points and fees dollar trigger for highcost mortgages in 2018 will be $1,052.
For the general rule to determine
consumers’ ability to repay mortgage
loans, the maximum thresholds for total
points and fees for qualified mortgages
in 2018 will be 3 percent of the total
loan amount for a loan greater than or
equal to $105,158; $3,155 for a loan
amount greater than or equal to $63,095
but less than $105,158; 5 percent of the
total loan amount for a loan greater than
or equal to $21,032 but less than
$63,095; $1,052 for a loan amount
greater than or equal to $13,145 but less
than $21,032; and 8 percent of the total
loan amount for a loan amount less than
$13,145.
I. Background
A. Credit Card Annual Adjustments
Minimum Interest Charge Disclosure
Thresholds
Sections 1026.6(b)(2)(iii) and
1026.60(b)(3) of the Bureau’s Regulation
Z implement sections 127(a)(3) and
127(c)(1)(A)(ii)(II) of TILA. Sections
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1026.6(b)(2)(iii) and 1026.60(b)(3)
require the disclosure of any minimum
interest charge exceeding $1.00 that
could be imposed during a billing cycle
and provide that, for open-end
consumer credit plans, the minimum
interest charge thresholds will be recalculated annually using the CPI that
was in effect on the preceding June 1;
the Bureau uses the Consumer Price
Index for Urban Wage Earners and
Clerical Workers (CPI–W) for this
adjustment. When the cumulative
change in the adjusted minimum value
derived from applying the annual CPI–
W level to the current amounts in
§§ 1026.6(b)(2)(iii) and 1026.60(b)(3) has
risen by a whole dollar, the minimum
interest charge amounts set forth in the
regulation will be increased by $1.00.
The BLS publishes consumer-based
indices monthly but does not report a
CPI change on June 1; adjustments are
reported in the middle of the month.
This adjustment analysis is based on the
CPI–W index in effect on June 1, 2017,
which was reported by BLS on May 12,
2017, and reflects the percentage change
from April 2016 to April 2017. The CPI–
W is a subset of the Consumer Price
Index for All Urban Consumers (CPI–U)
index and represents approximately 28
percent of the U.S. population. The
adjustment analysis accounts for a 2.1
percent increase in the CPI–W from
April 2016 to April 2017. This increase
in the CPI–W when applied to the
current amounts in §§ 1026.6(b)(2)(iii)
and 1026.60(b)(3) did not trigger an
increase in the minimum interest charge
threshold of at least $1.00, and the
Bureau is therefore not amending
§§ 1026.6(b)(2)(iii) and 1026.60(b)(3).
Safe Harbor Penalty Fees
Section 1026.52(b)(1)(ii)(A) and (B) of
the Bureau’s Regulation Z implements
section 149(e) of TILA, established by
the CARD Act.1 Section
1026.52(b)(1)(ii)(D) provides that the
safe harbor provision, which establishes
the permissible penalty fee thresholds
in § 1026.52(b)(1)(ii)(A) and (B), will be
re-calculated annually using the CPI
that was in effect on the preceding June
1; the Bureau uses the CPI–W for this
adjustment. The BLS publishes
consumer-based indices monthly but
does not report a CPI change on June 1;
adjustments are reported in the middle
of the month. The CPI–W is a subset of
the CPI–U index and represents
approximately 28 percent of the U.S.
population. When the cumulative
change in the adjusted value derived
1 Credit Card Accountability Responsibility and
Disclosure Act of 2009, Public Law 111–24, 123
Stat. 1734 (2009).
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Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Rules and Regulations
from applying the annual CPI–W level
to the current amounts in
§ 1026.52(b)(1)(ii)(A) and (B) has risen
by a whole dollar, those amounts will be
increased by $1.00. Similarly, when the
cumulative change in the adjusted value
derived from applying the annual CPI–
W level to the current amounts in
§ 1026.52(b)(1)(ii)(A) and (B) has
decreased by a whole dollar, those
amounts will be decreased by $1.00. See
comment 52(b)(1)(ii)–2. The 2018
adjustment analysis is based on the CPI–
W index in effect on June 1, 2017,
which was reported by BLS on May 12,
2017, and reflects the percentage change
from April 2016 to April 2017. The 2.1
percent increase in the CPI–W from
April 2016 to April 2017 did not trigger
an increase in the first violation safe
harbor penalty fee of $27 or the
subsequent violation safe harbor penalty
fee of $38, and the Bureau is therefore
not amending § 1026.52(b)(1)(ii)(A) and
(B) for the 2018 calendar year.
B. HOEPA Annual Threshold
Adjustments
Section 1026.32(a)(1)(ii) of the
Bureau’s Regulation Z implements
section 1431 of the Dodd-Frank Act,2
which amended the HOEPA points and
fees coverage test. Under
§ 1026.32(a)(1)(ii)(A) and (B), when
determining whether a transaction is a
high-cost mortgage, the determination of
the applicable points and fees coverage
test is based upon whether the total loan
amount is for $20,000 or more, or for
less than $20,000. Section
1026.32(a)(1)(ii) provides that this
threshold amount be recalculated
annually using the CPI index in effect
on June 1; the Bureau uses the CPI–U for
this adjustment. The CPI–U is based on
all urban consumers and represents
approximately 88 percent of the U.S.
population. The BLS publishes
consumer-based indices monthly but
does not report a CPI change on June 1;
adjustments are reported in the middle
of each month. The 2018 adjustment is
based on the CPI–U index in effect on
June 1, which was reported by BLS on
May 12, 2017, and reflects the
percentage change from April 2016 to
April 2017. The adjustment to the
$20,000 figure being adopted here
reflects a 2.2 percent increase in the
CPI–U index for this period and is
rounded to whole dollars for ease of
compliance.
Under § 1026.32(a)(1)(ii)(B) the
HOEPA points and fees dollar trigger is
$1,000. Section 1026.32(a)(1)(ii)(B)
provides that this threshold amount will
be recalculated annually using the CPI
index in effect on June 1; the Bureau
uses the CPI–U for this adjustment. The
2018 adjustment is based on the CPI–U
index in effect on June 1, which was
reported by BLS on May 12, 2017, and
reflects the percentage change from
April 2016 to April 2017. The
adjustment to the $1,000 figure being
adopted here reflects a 2.2 percent
increase in the CPI–U index for this
period and is rounded to whole dollars
for ease of compliance.
C. Ability To Repay and Qualified
Mortgages Annual Threshold
Adjustments
The Bureau’s Regulation Z
implements sections 1411 and 1412 of
the Dodd-Frank Act, which generally
require creditors to make a reasonable,
good faith determination of a
consumer’s ability to repay any
consumer credit transaction secured by
a dwelling, and establishes certain
protections from liability under this
requirement for qualified mortgages.
Under § 1026.43(e)(3)(i), a covered
transaction is not a qualified mortgage if
the transaction’s points and fees exceed:
3 Percent of the total loan amount for a
loan amount greater than or equal to
$100,000; $3,000 for a loan amount
greater than or equal to $60,000 but less
than $100,000; 5 percent of the total
loan amount for loans greater than or
equal to $20,000 but less than $60,000;
$1,000 for a loan amount greater than or
equal to $12,500 but less than $20,000;
or 8 percent of the total loan amount for
loans less than $12,500. Section
1026.43(e)(3)(ii) provides that the limits
and loan amounts in § 1026.43(e)(3)(i)
are recalculated annually for inflation
using the CPI–U index in effect on June
1. The CPI–U is based on all urban
consumers and represents
approximately 88 percent of the U.S.
population. The BLS publishes
consumer-based indices monthly but
does not report a CPI change on June 1;
adjustments are reported in the middle
of each month. The 2018 adjustment is
based on the CPI–U index in effect on
June 1, which was reported by BLS on
May 12, 2017, and reflects the
percentage change from April 2016 to
April 2017. The adjustment to the 2017
figures being adopted here reflects a 2.2
percent increase in the CPI–U index for
this period and is rounded to whole
dollars for ease of compliance.
2 Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111–203, 124 Stat. 1376
(2010).
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41159
II. Adjustment and Commentary
Revision
A. Credit Card Annual Adjustments
Minimum Interest Charge Disclosure
Thresholds—§§ 1026.6(b)(2)(iii) and
1026.60(b)(3)
The minimum interest charge
amounts for §§ 1026.6(b)(2)(iii) and
1026.60(b)(3) will remain unchanged at
$1.00 for the year 2018. Accordingly,
the Bureau is not amending these
sections of Regulation Z.
Safe Harbor Penalty Fees—
§ 1026.52(b)(1)(ii)(A) and (B)
The safe harbor penalty fee amounts
remain unchanged at $27 for
§ 1026.52(b)(1)(ii)(A) (first violation safe
harbor penalty fee) and $38 for
§ 1026.52(b)(1)(ii)(B) (subsequent
violation safe harbor penalty fee) for the
year 2018. Accordingly, the Bureau is
not amending these sections of
Regulation Z. The Bureau is amending
comment 52(b)(1)(ii)–2.i to preserve a
list of the historical thresholds for this
provision.
B. HOEPA Annual Threshold
Adjustment—Comments 32(a)(1)(ii)–1
and –3
Effective January 1, 2018, for purposes
of determining under § 1026.32(a)(1)(ii)
the points and fees coverage test under
HOEPA to which a transaction is
subject, the total loan amount threshold
is $21,032, and the adjusted points and
fees dollar trigger under
§ 1026.32(a)(1)(ii)(B) is $1,052. When
the total loan amount for a transaction
is $21,032 or more, and the points and
fees amount exceeds 5 percent of the
total loan amount, the transaction is a
high-cost mortgage. When the total loan
amount for a transaction is less than
$21,032, and the points and fees amount
exceeds the lesser of the adjusted points
and fees dollar trigger of $1,052 or 8
percent of the total loan amount, the
transaction is a high-cost mortgage. The
Bureau is amending comments
32(a)(1)(ii)–1 and –3, which list the
adjustments for each year, to reflect for
2018 the new loan amount dollar
threshold and the new points and fees
dollar trigger, respectively.
C. Ability To Repay and Qualified
Mortgages Annual Threshold
Adjustments
Effective January 1, 2018, for purposes
of determining whether a covered
transaction is a qualified mortgage
under § 1026.43(e), a covered
transaction is not a qualified mortgage
if, pursuant to § 1026.43(e)(3), the
transaction’s total points and fees
exceed 3 percent of the total loan
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41160
Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Rules and Regulations
amount for a loan amount greater than
or equal to $105,158; $3,155 for a loan
amount greater than or equal to $63,095
but less than $105,158; 5 percent of the
total loan amount for loans greater than
or equal to $21,032 but less than
$63,095; $1,052 for a loan amount
greater than or equal to $13,145 but less
than $21,032; or 8 percent of the total
loan amount for loans less than $13,145.
The Bureau is amending comment
43(e)(3)(ii)–1, which lists the
adjustments for each year, to reflect the
new dollar threshold amounts for 2018.
III. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure
Act, notice and opportunity for public
comment are not required if the Bureau
finds that notice and public comment
are impracticable, unnecessary, or
contrary to the public interest. 5 U.S.C.
553(b)(B). Pursuant to this final rule, in
Regulation Z, comments 32(a)(1)(ii)–1.iv
and –3.iv, 43(e)(3)(ii)–1.iv, and
52(b)(1)(ii)–2.i.E in supplement I are
added to update the exemption
thresholds. The amendments in this
final rule are technical and nondiscretionary, as they merely apply the
method previously established in
Regulation Z for determining
adjustments to the thresholds. For these
reasons, the Bureau has determined that
publishing a notice of proposed
rulemaking and providing opportunity
for public comment are unnecessary.
The amendments therefore are adopted
in final form.
B. Regulatory Flexibility Act
Because no notice of proposed
rulemaking is required, the Regulatory
Flexibility Act does not require an
initial or final regulatory flexibility
analysis. 5 U.S.C. 603(a), 604(a).
C. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3506;
5 CFR part 1320), the Bureau reviewed
this final rule. No collections of
information pursuant to the Paperwork
Reduction Act are contained in the final
rule.
List of Subjects in 12 CFR Part 1026
Advertising, Consumer protection,
Credit, Credit unions, Mortgages,
National banks, Reporting and
recordkeeping requirements, Savings
associations, Truth in lending.
Authority and Issuance
For the reasons set forth in the
preamble, the Bureau amends
Regulation Z, 12 CFR part 1026, as set
forth below:
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PART 1026—TRUTH IN LENDING
(REGULATION Z)
1. The authority citation for part 1026
continues to read as follows:
■
Authority: 12 U.S.C. 2601, 2603–2605,
2607, 2609, 2617, 3353, 5511, 5512, 5532,
5581; 15 U.S.C. 1601 et seq.
2. In Supplement I to part 1026—
Official Interpretations:
■ a. Under Section 1026.32—
Requirements for High-Cost Mortgages,
under 32(a) Coverage, under Paragraph
32(a)(1)(ii), paragraphs 1.iv and 3.iv are
added.
■ b. Under Section 1026.43—Minimum
Standards for Transactions Secured by
a Dwelling, under 43(e) Qualified
mortgages, under Paragraph 43(e)(3)(ii),
paragraph 1.iv is added.
■ c. Under Section 1026.52—
Limitations on Fees, under 52(b)
Limitations on Penalty Fees, under
52(b)(1)(ii) Safe harbors, paragraph 2.i.E
is added.
The additions read as follows:
■
Supplement I to Part 1026—Official
Interpretations
*
*
*
*
*
*
*
Subpart G—Special Rules Applicable
to Credit Card Accounts and Open-End
Credit Offered to College Students
*
*
*
*
*
Section 1026.52—Limitations on Fees
*
*
*
*
*
52(b) Limitations on Penalty Fees
*
*
*
*
*
52(b)(1)(ii) Safe harbors
*
*
Subpart E—Special Rules for Certain
Home Mortgage Transactions
*
A. For a loan amount greater than or
equal to $105,158: 3 percent of the total
loan amount;
B. For a loan amount greater than or
equal to $63,095 but less than $105,158:
$3,155;
C. For a loan amount greater than or
equal to $21,032 but less than $63,095:
5 percent of the total loan amount;
D. For a loan amount greater than or
equal to $13,145 but less than $21,032:
$1,052;
E. For a loan amount less than
$13,145: 8 percent of the total loan
amount.
*
*
*
*
*
*
Section 1026.32—Requirements for
Certain Closed-End Home Mortgages
32(a) Coverage
*
*
*
*
*
Paragraph 32(a)(1)(ii).
1. * * *
iv. For 2018, $1,052, reflecting a 2.2
percent increase in the CPI–U from June
2016 to June 2017, rounded to the
nearest whole dollar.
*
*
*
*
*
3. * * *
iv. For 2018, $21,032, reflecting a 2.2
percent increase in the CPI–U from June
2016 to June 2017, rounded to the
nearest whole dollar.
*
*
*
*
*
*
*
*
*
2. * * *
i. * * *
E. Card issuers were permitted to
impose a fee for violating the terms of
an agreement if the fee did not exceed
$27 under § 1026.52(b)(1)(ii)(A) and $38
under § 1026.52(b)(1)(ii)(B), through
December 31, 2017.
*
*
*
*
*
Dated: July 25, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial
Protection.
[FR Doc. 2017–18003 Filed 8–29–17; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
Section 1026.43—Minimum Standards
for Transactions Secured by a Dwelling
[Docket No. FAA–2017–0503; Product
Identifier 2017–NM–032–AD; Amendment
39–19009; AD 2017–17–19]
*
RIN 2120–AA64
*
*
*
*
43(e) Qualified mortgages.
*
*
*
*
*
Paragraph 43(e)(3)(ii).
1. * * *
iv. For 2018, reflecting a 2.2 percent
increase in the CPI–U that was reported
on the preceding June 1, a covered
transaction is not a qualified mortgage
unless the transaction’s total points and
fees do not exceed:
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Airworthiness Directives; The Boeing
Company Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
SUMMARY: We are adopting a new
airworthiness directive (AD) for all The
Boeing Company Model DC–9–81 (MD–
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]]>Agencies
[Federal Register Volume 82, Number 167 (Wednesday, August 30, 2017)]
[Rules and Regulations]
[Pages 41158-41160]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18003]
=======================================================================
-----------------------------------------------------------------------
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1026
Truth in Lending (Regulation Z) Annual Threshold Adjustments
(Credit Cards, HOEPA, and ATR/QM)
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule; official interpretation.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
issuing this final rule amending the official interpretations for
Regulation Z, which implements the Truth in Lending Act (TILA). The
Bureau is required to calculate annually the dollar amounts for several
provisions in Regulation Z; this final rule revises, as applicable, the
dollar amounts for provisions implementing TILA and amendments to TILA,
including under the Credit Card Accountability Responsibility and
Disclosure Act of 2009 (CARD Act), the Home Ownership and Equity
Protection Act of 1994 (HOEPA), and the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Dodd-Frank Act). The Bureau is adjusting
these amounts, where appropriate, based on the annual percentage change
reflected in the Consumer Price Index (CPI) in effect on June 1, 2017.
DATES: This final rule is effective January 1, 2018.
FOR FURTHER INFORMATION CONTACT: Jaclyn Maier, Counsel, Office of
Regulations, Consumer Financial Protection Bureau, 1700 G Street NW.,
Washington, DC 20552 at (202) 435-7700.
SUPPLEMENTARY INFORMATION: The Bureau is amending the official
interpretations for Regulation Z, which implements TILA, to update the
dollar amounts of various thresholds that are adjusted annually based
on the annual percentage change in the CPI as published by the Bureau
of Labor Statistics (BLS). Specifically, for open-end consumer credit
plans under TILA, the threshold that triggers requirements to disclose
minimum interest charges will remain unchanged at $1.00 in 2018. For
open-end consumer credit plans under the CARD Act amendments to TILA,
the adjusted dollar amount for the safe harbor for a first violation
penalty fee will remain unchanged at $27 in 2018 and the adjusted
dollar amount for the safe harbor for a subsequent violation penalty
fee will remain unchanged at $38 in 2018. For HOEPA loans, the adjusted
total loan amount threshold for high-cost mortgages in 2018 will be
$21,032. The adjusted points and fees dollar trigger for high-cost
mortgages in 2018 will be $1,052. For the general rule to determine
consumers' ability to repay mortgage loans, the maximum thresholds for
total points and fees for qualified mortgages in 2018 will be 3 percent
of the total loan amount for a loan greater than or equal to $105,158;
$3,155 for a loan amount greater than or equal to $63,095 but less than
$105,158; 5 percent of the total loan amount for a loan greater than or
equal to $21,032 but less than $63,095; $1,052 for a loan amount
greater than or equal to $13,145 but less than $21,032; and 8 percent
of the total loan amount for a loan amount less than $13,145.
I. Background
A. Credit Card Annual Adjustments
Minimum Interest Charge Disclosure Thresholds
Sections 1026.6(b)(2)(iii) and 1026.60(b)(3) of the Bureau's
Regulation Z implement sections 127(a)(3) and 127(c)(1)(A)(ii)(II) of
TILA. Sections 1026.6(b)(2)(iii) and 1026.60(b)(3) require the
disclosure of any minimum interest charge exceeding $1.00 that could be
imposed during a billing cycle and provide that, for open-end consumer
credit plans, the minimum interest charge thresholds will be re-
calculated annually using the CPI that was in effect on the preceding
June 1; the Bureau uses the Consumer Price Index for Urban Wage Earners
and Clerical Workers (CPI-W) for this adjustment. When the cumulative
change in the adjusted minimum value derived from applying the annual
CPI-W level to the current amounts in Sec. Sec. 1026.6(b)(2)(iii) and
1026.60(b)(3) has risen by a whole dollar, the minimum interest charge
amounts set forth in the regulation will be increased by $1.00. The BLS
publishes consumer-based indices monthly but does not report a CPI
change on June 1; adjustments are reported in the middle of the month.
This adjustment analysis is based on the CPI-W index in effect on June
1, 2017, which was reported by BLS on May 12, 2017, and reflects the
percentage change from April 2016 to April 2017. The CPI-W is a subset
of the Consumer Price Index for All Urban Consumers (CPI-U) index and
represents approximately 28 percent of the U.S. population. The
adjustment analysis accounts for a 2.1 percent increase in the CPI-W
from April 2016 to April 2017. This increase in the CPI-W when applied
to the current amounts in Sec. Sec. 1026.6(b)(2)(iii) and
1026.60(b)(3) did not trigger an increase in the minimum interest
charge threshold of at least $1.00, and the Bureau is therefore not
amending Sec. Sec. 1026.6(b)(2)(iii) and 1026.60(b)(3).
Safe Harbor Penalty Fees
Section 1026.52(b)(1)(ii)(A) and (B) of the Bureau's Regulation Z
implements section 149(e) of TILA, established by the CARD Act.\1\
Section 1026.52(b)(1)(ii)(D) provides that the safe harbor provision,
which establishes the permissible penalty fee thresholds in Sec.
1026.52(b)(1)(ii)(A) and (B), will be re-calculated annually using the
CPI that was in effect on the preceding June 1; the Bureau uses the
CPI-W for this adjustment. The BLS publishes consumer-based indices
monthly but does not report a CPI change on June 1; adjustments are
reported in the middle of the month. The CPI-W is a subset of the CPI-U
index and represents approximately 28 percent of the U.S. population.
When the cumulative change in the adjusted value derived
[[Page 41159]]
from applying the annual CPI-W level to the current amounts in Sec.
1026.52(b)(1)(ii)(A) and (B) has risen by a whole dollar, those amounts
will be increased by $1.00. Similarly, when the cumulative change in
the adjusted value derived from applying the annual CPI-W level to the
current amounts in Sec. 1026.52(b)(1)(ii)(A) and (B) has decreased by
a whole dollar, those amounts will be decreased by $1.00. See comment
52(b)(1)(ii)-2. The 2018 adjustment analysis is based on the CPI-W
index in effect on June 1, 2017, which was reported by BLS on May 12,
2017, and reflects the percentage change from April 2016 to April 2017.
The 2.1 percent increase in the CPI-W from April 2016 to April 2017 did
not trigger an increase in the first violation safe harbor penalty fee
of $27 or the subsequent violation safe harbor penalty fee of $38, and
the Bureau is therefore not amending Sec. 1026.52(b)(1)(ii)(A) and (B)
for the 2018 calendar year.
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\1\ Credit Card Accountability Responsibility and Disclosure Act
of 2009, Public Law 111-24, 123 Stat. 1734 (2009).
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B. HOEPA Annual Threshold Adjustments
Section 1026.32(a)(1)(ii) of the Bureau's Regulation Z implements
section 1431 of the Dodd-Frank Act,\2\ which amended the HOEPA points
and fees coverage test. Under Sec. 1026.32(a)(1)(ii)(A) and (B), when
determining whether a transaction is a high-cost mortgage, the
determination of the applicable points and fees coverage test is based
upon whether the total loan amount is for $20,000 or more, or for less
than $20,000. Section 1026.32(a)(1)(ii) provides that this threshold
amount be recalculated annually using the CPI index in effect on June
1; the Bureau uses the CPI-U for this adjustment. The CPI-U is based on
all urban consumers and represents approximately 88 percent of the U.S.
population. The BLS publishes consumer-based indices monthly but does
not report a CPI change on June 1; adjustments are reported in the
middle of each month. The 2018 adjustment is based on the CPI-U index
in effect on June 1, which was reported by BLS on May 12, 2017, and
reflects the percentage change from April 2016 to April 2017. The
adjustment to the $20,000 figure being adopted here reflects a 2.2
percent increase in the CPI-U index for this period and is rounded to
whole dollars for ease of compliance.
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\2\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, 124 Stat. 1376 (2010).
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Under Sec. 1026.32(a)(1)(ii)(B) the HOEPA points and fees dollar
trigger is $1,000. Section 1026.32(a)(1)(ii)(B) provides that this
threshold amount will be recalculated annually using the CPI index in
effect on June 1; the Bureau uses the CPI-U for this adjustment. The
2018 adjustment is based on the CPI-U index in effect on June 1, which
was reported by BLS on May 12, 2017, and reflects the percentage change
from April 2016 to April 2017. The adjustment to the $1,000 figure
being adopted here reflects a 2.2 percent increase in the CPI-U index
for this period and is rounded to whole dollars for ease of compliance.
C. Ability To Repay and Qualified Mortgages Annual Threshold
Adjustments
The Bureau's Regulation Z implements sections 1411 and 1412 of the
Dodd-Frank Act, which generally require creditors to make a reasonable,
good faith determination of a consumer's ability to repay any consumer
credit transaction secured by a dwelling, and establishes certain
protections from liability under this requirement for qualified
mortgages. Under Sec. 1026.43(e)(3)(i), a covered transaction is not a
qualified mortgage if the transaction's points and fees exceed: 3
Percent of the total loan amount for a loan amount greater than or
equal to $100,000; $3,000 for a loan amount greater than or equal to
$60,000 but less than $100,000; 5 percent of the total loan amount for
loans greater than or equal to $20,000 but less than $60,000; $1,000
for a loan amount greater than or equal to $12,500 but less than
$20,000; or 8 percent of the total loan amount for loans less than
$12,500. Section 1026.43(e)(3)(ii) provides that the limits and loan
amounts in Sec. 1026.43(e)(3)(i) are recalculated annually for
inflation using the CPI-U index in effect on June 1. The CPI-U is based
on all urban consumers and represents approximately 88 percent of the
U.S. population. The BLS publishes consumer-based indices monthly but
does not report a CPI change on June 1; adjustments are reported in the
middle of each month. The 2018 adjustment is based on the CPI-U index
in effect on June 1, which was reported by BLS on May 12, 2017, and
reflects the percentage change from April 2016 to April 2017. The
adjustment to the 2017 figures being adopted here reflects a 2.2
percent increase in the CPI-U index for this period and is rounded to
whole dollars for ease of compliance.
II. Adjustment and Commentary Revision
A. Credit Card Annual Adjustments
Minimum Interest Charge Disclosure Thresholds--Sec. Sec.
1026.6(b)(2)(iii) and 1026.60(b)(3)
The minimum interest charge amounts for Sec. Sec.
1026.6(b)(2)(iii) and 1026.60(b)(3) will remain unchanged at $1.00 for
the year 2018. Accordingly, the Bureau is not amending these sections
of Regulation Z.
Safe Harbor Penalty Fees--Sec. 1026.52(b)(1)(ii)(A) and (B)
The safe harbor penalty fee amounts remain unchanged at $27 for
Sec. 1026.52(b)(1)(ii)(A) (first violation safe harbor penalty fee)
and $38 for Sec. 1026.52(b)(1)(ii)(B) (subsequent violation safe
harbor penalty fee) for the year 2018. Accordingly, the Bureau is not
amending these sections of Regulation Z. The Bureau is amending comment
52(b)(1)(ii)-2.i to preserve a list of the historical thresholds for
this provision.
B. HOEPA Annual Threshold Adjustment--Comments 32(a)(1)(ii)-1 and -3
Effective January 1, 2018, for purposes of determining under Sec.
1026.32(a)(1)(ii) the points and fees coverage test under HOEPA to
which a transaction is subject, the total loan amount threshold is
$21,032, and the adjusted points and fees dollar trigger under Sec.
1026.32(a)(1)(ii)(B) is $1,052. When the total loan amount for a
transaction is $21,032 or more, and the points and fees amount exceeds
5 percent of the total loan amount, the transaction is a high-cost
mortgage. When the total loan amount for a transaction is less than
$21,032, and the points and fees amount exceeds the lesser of the
adjusted points and fees dollar trigger of $1,052 or 8 percent of the
total loan amount, the transaction is a high-cost mortgage. The Bureau
is amending comments 32(a)(1)(ii)-1 and -3, which list the adjustments
for each year, to reflect for 2018 the new loan amount dollar threshold
and the new points and fees dollar trigger, respectively.
C. Ability To Repay and Qualified Mortgages Annual Threshold
Adjustments
Effective January 1, 2018, for purposes of determining whether a
covered transaction is a qualified mortgage under Sec. 1026.43(e), a
covered transaction is not a qualified mortgage if, pursuant to Sec.
1026.43(e)(3), the transaction's total points and fees exceed 3 percent
of the total loan
[[Page 41160]]
amount for a loan amount greater than or equal to $105,158; $3,155 for
a loan amount greater than or equal to $63,095 but less than $105,158;
5 percent of the total loan amount for loans greater than or equal to
$21,032 but less than $63,095; $1,052 for a loan amount greater than or
equal to $13,145 but less than $21,032; or 8 percent of the total loan
amount for loans less than $13,145. The Bureau is amending comment
43(e)(3)(ii)-1, which lists the adjustments for each year, to reflect
the new dollar threshold amounts for 2018.
III. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure Act, notice and opportunity for
public comment are not required if the Bureau finds that notice and
public comment are impracticable, unnecessary, or contrary to the
public interest. 5 U.S.C. 553(b)(B). Pursuant to this final rule, in
Regulation Z, comments 32(a)(1)(ii)-1.iv and -3.iv, 43(e)(3)(ii)-1.iv,
and 52(b)(1)(ii)-2.i.E in supplement I are added to update the
exemption thresholds. The amendments in this final rule are technical
and non-discretionary, as they merely apply the method previously
established in Regulation Z for determining adjustments to the
thresholds. For these reasons, the Bureau has determined that
publishing a notice of proposed rulemaking and providing opportunity
for public comment are unnecessary. The amendments therefore are
adopted in final form.
B. Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not require an initial or final
regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a).
C. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3506; 5 CFR part 1320), the Bureau reviewed this final rule. No
collections of information pursuant to the Paperwork Reduction Act are
contained in the final rule.
List of Subjects in 12 CFR Part 1026
Advertising, Consumer protection, Credit, Credit unions, Mortgages,
National banks, Reporting and recordkeeping requirements, Savings
associations, Truth in lending.
Authority and Issuance
For the reasons set forth in the preamble, the Bureau amends
Regulation Z, 12 CFR part 1026, as set forth below:
PART 1026--TRUTH IN LENDING (REGULATION Z)
0
1. The authority citation for part 1026 continues to read as follows:
Authority: 12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353,
5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq.
0
2. In Supplement I to part 1026--Official Interpretations:
0
a. Under Section 1026.32--Requirements for High-Cost Mortgages, under
32(a) Coverage, under Paragraph 32(a)(1)(ii), paragraphs 1.iv and 3.iv
are added.
0
b. Under Section 1026.43--Minimum Standards for Transactions Secured by
a Dwelling, under 43(e) Qualified mortgages, under Paragraph
43(e)(3)(ii), paragraph 1.iv is added.
0
c. Under Section 1026.52--Limitations on Fees, under 52(b) Limitations
on Penalty Fees, under 52(b)(1)(ii) Safe harbors, paragraph 2.i.E is
added.
The additions read as follows:
Supplement I to Part 1026--Official Interpretations
* * * * *
Subpart E--Special Rules for Certain Home Mortgage Transactions
* * * * *
Section 1026.32--Requirements for Certain Closed-End Home Mortgages
32(a) Coverage
* * * * *
Paragraph 32(a)(1)(ii).
1. * * *
iv. For 2018, $1,052, reflecting a 2.2 percent increase in the CPI-
U from June 2016 to June 2017, rounded to the nearest whole dollar.
* * * * *
3. * * *
iv. For 2018, $21,032, reflecting a 2.2 percent increase in the
CPI-U from June 2016 to June 2017, rounded to the nearest whole dollar.
* * * * *
Section 1026.43--Minimum Standards for Transactions Secured by a
Dwelling
* * * * *
43(e) Qualified mortgages.
* * * * *
Paragraph 43(e)(3)(ii).
1. * * *
iv. For 2018, reflecting a 2.2 percent increase in the CPI-U that
was reported on the preceding June 1, a covered transaction is not a
qualified mortgage unless the transaction's total points and fees do
not exceed:
A. For a loan amount greater than or equal to $105,158: 3 percent
of the total loan amount;
B. For a loan amount greater than or equal to $63,095 but less than
$105,158: $3,155;
C. For a loan amount greater than or equal to $21,032 but less than
$63,095: 5 percent of the total loan amount;
D. For a loan amount greater than or equal to $13,145 but less than
$21,032: $1,052;
E. For a loan amount less than $13,145: 8 percent of the total loan
amount.
* * * * *
Subpart G--Special Rules Applicable to Credit Card Accounts and
Open-End Credit Offered to College Students
* * * * *
Section 1026.52--Limitations on Fees
* * * * *
52(b) Limitations on Penalty Fees
* * * * *
52(b)(1)(ii) Safe harbors
* * * * *
2. * * *
i. * * *
E. Card issuers were permitted to impose a fee for violating the
terms of an agreement if the fee did not exceed $27 under Sec.
1026.52(b)(1)(ii)(A) and $38 under Sec. 1026.52(b)(1)(ii)(B), through
December 31, 2017.
* * * * *
Dated: July 25, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2017-18003 Filed 8-29-17; 8:45 am]
BILLING CODE 4810-AM-P
